New Jersey Tax Guide
New Jersey state tax rates and rules for income, sales, property, gas, cigarette, and other taxes that impact residents.


Katelyn Washington
New Jersey state tax: Overview
New Jersey residents know they can pay some high taxes. Everything from gas tax to property taxes are among the highest in the states. Garden State heirs may also pay a death tax.
However, there is some good news: New Jersey's state sales tax isn't so high compared to sales taxes in other states. After all, several products in the state are exempt from tax, and New Jersey's sales tax rate is reduced in some areas.
Plus, you may qualify for a New Jersey property tax relief program to help you with your high homeowner taxes.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's more of what you need to know about the Garden State's tax disposition.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
New Jersey income tax
New Jersey Income Tax Range: Single filers
Up to $20,000 | 1.4% |
$20,001 to $35,000 | 1.75% |
$35,001 to $40,000 | 3.5% |
$40,001 to $75,000 | 5.525% |
$75,001 to $500,000 | 6.37% |
$500,001 to $1 million | 8.97% |
More than $1 million | 10.75% |
New Jersey Income Tax Range: Joint filers
Up to $20,000 | 1.4% |
$20,001 to $50,000 | 1.75% |
$50,001 to $70,000 | 2.45% |
$70,001 to $80,000 | 3.5% |
$80,001 to $150,000 | 5.525% |
$151,000 to $500,000 | 6.37% |
$500,001 to $1 million | 8.97% |
More than $1 million | 10.75% |
New Jersey tax on retirement income: New Jersey doesn't tax Social Security retirement benefits, Military pensions, or Railroad Retirement benefits.
Taxpayers 62 and older (or those who have a disability) may exclude all or part of their retirement income from state taxation. To qualify for the exclusion, taxpayers cannot have an income above $150,000.
New Jersey sales tax
New Jersey imposes a 6.625% state sales tax. Localities can add an additional 3.313%.
However, the average local and combined sales tax rate is only 6.601%, according to the Tax Foundation. That's because the sales tax rate is reduced to 3.3125% in New Jersey's Urban Enterprise Zones.
- Groceries are tax-exempt.
- Prescription drugs are tax-exempt.
- Diapers are tax-exempt.
- Women's menstrual products are tax-exempt.
How much are property taxes in New Jersey?
In New Jersey, the average effective property tax rate is 2.08%, which is one of the highest in the nation.
New Jersey Property Tax Breaks
Eligible New Jersey residents who owned or rented their home during the tax year may qualify for ANCHOR property tax relief. Last year's payments were up to $1,750 each.
Additionally, qualifying New Jersey homeowners may also receive a property tax freeze. To qualify, residents must have lived in their current home since at least 2020, among other requirements.
These two New Jersey property tax relief payments are in addition to Stay NJ, a new property tax relief program set to make payouts in early 2026. Learn more on the state's Division of Taxation website.
New Jersey gas tax
Gasoline: $0.449 per gallon (effective January 2025)
Diesel: $0.519 per gallon (effective January 2025)
New Jersey taxes on alcohol and tobacco
Cigarettes | $2.70 per pack |
Other tobacco products | 30% of wholesale price |
Beer | $0.12 per gallon |
Wine | $0.875 per gallon |
Liquor | $5.50 per gallon |
New Jersey estate and inheritance taxes
There is no longer an estate tax in New Jersey, but that doesn't mean residents are off the hook for paying death taxes.
The state has an inheritance tax of between 11% and 16%. However, the heirs below won't need to pay a thing.
- Spouses
- Children
- Grandchildren and great-grandchildren
- Parents and grandparents
- Civil union partners
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.
- Katelyn WashingtonFormer Tax Writer
-
AI Is Missing the Wisdom of Older Adults: What It Means for You
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
Homeschoolers: 529 Plan Savings Could Soon Work for You
Savings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the Senate
Tax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify
Tax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025
Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
Ten Cheapest Places To Live in New York
Property Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.
-
‘My Etsy Shop is Dead’: Vendors Cry for Help Amid Trump’s Tariffs
Tariffs Small businesses are struggling to thrive as they absorb the Trump administration’s new wave of tariffs.
-
Three Things Star Wars Fans Taught Me About Tax
Tax Tips May the force be with you and your taxes this Star Wars Day 2025.
-
Retirees: Don’t Miss These Valuable State Tax Breaks in 2025
Retirement Planning Selecting the right state for retirement can significantly impact your financial well-being.